MMK Corporate Governance Rating Improves

26 July 2011 (09:28)

The consortium of Russian Directors Institute and Expert RA (a rating agency) promoted Magnitogorsk Iron & Steel Works (MMK) corporate governance rating to eight (on a ten-point scale), which corresponds with the Well-Developed Corporate Governance Practice on the National Corporate Governance Rating scale.

This means the company complies with the Russian corporate governance legislation, follows most of the recommendations prescribed in the Russian Corporate Behavior Code and some of the recommendations prescribed by the advanced international corporate governance policy. According to the consortium, a company with such a rating runs only very low risk of losing a proprietor due to the quality of governance.

The National Corporate Governance Rating indicates the quality of a company’s corporate governance and allows to compare the level of corporate governance and related risks across different businesses. This rating is a tool for perfecting the corporate governance practices in a company and for improving its relationships with the investors. The rating provides an all-round evaluation of the corporate governance practices in a certain company on the basis of the following four criteria: the stockholders’ rights; the composition and the efficiency of the governing and controlling bodies; the transparency of information; and the actions taken with regard to the interests of other parties involved and the social responsibility of a business.

The corporate governance practices are evaluated in accordance with the method adopted by the consortium. The method rests upon comparing the existing corporate governance practices of a company with the Russian legislative requirements, with the recommendations prescribed in the Corporate Governance Code, and with the other Russian and international standards of advanced corporate governance practices.

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